New Orleans OIG finds NORDC, Foundation non compliant with audit law

NEW ORLEANS (WGNO) — In a letter released Wednesday, July 9, the New Orleans Office of Inspector General reports that two city recreational entities failed to comply with audit law.

The letter was addressed to New Orleans Recreational Development Commission CEO Larry Barabino, Jr. and New Orleans Recreation Development Foundation Administrator Cheryl Mendy.

The OIG claims that NORDC and the Foundation failed to meet their legal obligations to obtain audits and sworn financial statements.

According to the City Charter, NORDC was required to “prepare and transmit to the Mayor, Council and Inspector General of the City of New Orleans an independent audit prepared by a Certified Public Accountant or firm of Certified Public Accountants within 120 days of the end of its fiscal year.
Letter excerpt

OIG evaluators reported that when NORDC provided that last three years of audits, they did not provide any independent audits.

NORDC officials reportedly claimed that they were not required to conduct annual audits because the City Council included NORDC in citywide audits but despite the City Charter’s allowance, “NORDC is still requires by law to submit its own independent audits.”

Unlike most City departments, NORDC was led by a CEO, who reported to the Commission rather than to the mayor or other City officials.9 This placed NORDC more in line with other boards and commissions of the City, such as the Audubon Commission and the Downtown Development District, both of which produced independent annual audits.
Letter excerpt

Additionally, OIG evaluators reported not receiving sworn financial statements, also required by law, since 2021.

Since its creation in 2010 for public purpose of supporting athletics and recreation in New Orleans, the Foundation, which is classified as a “quasi-public body,” received a revenue of $374,421 and $1,130,134 in 2022 and 2023 from public entities including the State of Louisiana, the City of New Orleans, and boards or commissions of the City of New Orleans.

An entity that received between $200,000 and $500,000 dollars of revenue in a fiscal year was required to obtain an “annual review of its financial statements to be accompanied by an attestation report. An entity that received $500,000 dollars or more of revenue was required to obtain an annual audit, in accordance with the Louisiana Governmental Audit Guide.
Letter excerpt

A Foundation representative reportedly told OIG evaluators that an audit was not conducted because they did not receive federal money. Additionally, they explained the Foundation stopped audits in recent years as a cost saving measure.

In 2023, through the Foundation’s Cooperative Endeavor Agreement (CEA), NORD Foundation was provided $150,000 from the city to use for audits and other things. It was renewed in 2024 making another $150,000 available.

The letter ends with the OIG recommending that NORDC and the Foundation take immediate steps necessary to become compliant with all legal obligations for financial reporting by the end of 2026.

Read the OIG’s Letter

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